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  • HDFC Home Improvement Loan

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  • Renovating or refurnishing your home can be a daunting task especially when you need funds to execute it. The HDFC Home Improvement Loan lets you upgrade your home for a more comfortable living.
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    Renovating or refurnishing your home can be a daunting task especially when you need funds to execute it. The HDFC Home Improvement Loan lets you upgrade your home for a more comfortable living. From new flooring to plastering and painting, home improvement loans from HDFC boast of several unique features with easy and stress-free documentation.

    Interest Rates

    HDFC offers home improvement loans based on two types of interest rates – home loan interest rates and TruFixed Loan (2-year Fixed Rate). Below are the details for your reference:

    1. For Salaried/Self-Employed Professionals

    Loan Slab Home Loan Interest Rate (% p.a.) TruFixed Loan Interest Rate (% p.a.)
    For Woman (up to Rs.30 lakh) 8.65 to 9.15 9.40 to 9.90
    For Others (up to Rs.30 lakh) 8.70 to 9.20 9.45 to 9.95
    For Women (above Rs.30 lakh to Rs.75 lakh) 8.90 to 9.40 9.55 to 10.05
    For Others (above Rs.30 lakh to Rs.75 lakh) 8.95 to 9.45 9.60 to 10.10
    For Woman (above Rs.75 lakh) 8.95 to 9.45 9.60 to 10.10
    For Others (above Rs.75 lakh) 9 to 9.50 9.65 to 10.15

    2. For Self-Employed Non-Professionals

    Loan Slab Home Loan Interest Rate (% p.a.) TruFixed Loan Interest Rate (% p.a.)
    For Woman (up to Rs.30 lakh) 8.80 to 9.30 9.55 to 10.05
    For Others (up to Rs.30 lakh) 8.85 to 9.35 9.60 to 10.10
    For Women (above Rs.30 lakh and Rs.75 lakh) 9.05 to 9.55 9.70 to 10.20
    For Others (above Rs.30 lakh and Rs.75 lakh) 9.10 to 9.60 9.75 to 10.25
    For Woman (above Rs.75 lakh) 9.10 to 9.60 9.75 to 10.25
    For Others (above Rs.75 lakh) 9.15 to 9.65 9.80 to10.30

    Eligible Loan Amount

    Below are the details of the maximum funding and loan payment terms offered under the HDFC Home Improvement Loan for both salaried and self-employed individuals:

    Loan Amount Existing Customer New Customer
    Up to Rs.30 lakh 100% of the estimate (subject to a loan not more than 90% of the market value of the property) 90% of the estimate
    Rs.30 lakh – Rs.75 lakh 100% of the estimate (subject to a loan not more than 80% of the market value of the property) 80% of the estimate
    Above Rs.75 lakh 100% of the estimate (subject to a loan not more than 75% of the market value of the property) 75% of the estimate

    Eligibility Criteria

    HDFC offers home improvement loans to both salaried and self-employed individuals between the ages of 18 – 65 who are resident Indians. You can also add a co-applicant to increase the loan amount and a women co-applicant can get you a better interest rate. Additionally, all co-applicants need not necessarily be a co-owner of the property to avail the loan.

    Documents Required

    Below is the list of documents required to avail an HDFC Home Improvement Loan along with the application form:

    1. For Salaried:

    Identity and address proof (KYC)
    • Passport/driver license /voter ID/Aadhar card.
    Income Proof
    • Salary slips for the last three months.
    • Bank statement for the last six months reflecting salary credits.
    • Form 16 and latest IT Returns.
    Home/property improvement related documents
    • All original title deeds of the property.
    • Proof of no encumbrances on the property.
    • An estimate of the proposed work from a civil engineer/architect.
    Other related documents
    • Appointment letter/employment contract if you’re employed in the company for less than 1 year.
    • Bank statements for six months reflecting repayment of any existing loans.
    • Photograph of all applicants/co-applicants (passport size) to be placed on the application form with a signature across it.
    • Cheque for the processing fee and own contribution proof.

    2. For Self-Employed:

    Identity and address proof
    • Passport/driver license /voter ID/Aadhar card.
    Income proof
    • IT returns along with the tax assessment for the last three years (both the individual and the business entity with an attested by a Chartered Accountant).
    • Balance sheet, and P&L account statements with annexures/schedules for the last three years (both the individual and the business entity and which is attested by a Chartered Accountant).
    • Current account statements for the last six months of the business entity and the concerned individual’s savings account statement.
    Property/Home Improvement related documents
    • All original title deeds of the property.
    • Proof of no encumbrances on the property.
    • An estimate of the proposed work from a civil engineer or architect.
    Other related documents
    • Profile of the Business.
    • List of directors and shareholders along with their individual shareholding and should be certified by a CA/CS in case the business entity is a company.
    • Form 26 AS.
    • Articles and Memorandum of Association of the company.
    • In case the business entity is a partnership company, the partnership deed must be submitted.
    • Information regarding any existing loans of the individual as well as the business entity including the remaining loan term, outstanding loan amount, security purpose, instalments, etc.
    • Photograph of all applicants/co-applicants (passport size) to be submitted with the application form with a signature across it.
    • Cheque for the processing fee.
    • Own contribution proof.

    Charges & Fees

    HDFC home improvement loan also comes with other charges and fees. Below are the details:

    Particulars Charges
    Processing fee Salaried/self-employed professionals: Up to 0.50% of the loan amount or Rs.3,000 whichever is higher + applicable taxes Self-employed non-professionals: Up to 1.50% of the loan amount or Rs.4,500 whichever is higher + applicable taxes
    Fees on account of external opinion As the case may be
    Property insurance Premium amount to be paid directly to the insurance provider
    Charges for delayed payments Additional interest up to 24% p.a.
    Statutory/Regulatory All applicable charges as set by CERSAI
    Prepayment charges
    • Individual Borrowers*: No charges for floating rate of interest. For fixed rate of interest, no charges if paid through own source of funds; however, 2% is applicable if paid through refinance.
    • Other than Individual Borrowers*: 2% of the prepayment amount if prepayment is within 6 months; between 6 and 36 months, the borrower can prepay up to 25% of the opening principal amount; after 36 months, no prepayment charges
    • Individual Borrowers**: 2% of the prepayment amount + applicable taxes for both floating and fixed; however, if paid through own source and not through refinance, then the prepayment charges are nil.
    • Other than Individual Borrowers**: 2% of the prepayment amount if prepayment is within 6 months; between 6 and 36 months, the borrower can prepay up to 25% of the opening principal amount; after 36 months, no prepayment charges
    Conversion fee
    • Switch to lower rate in variable rate loans: 0.50% of the principal outstanding or a cap of Rs.50,000 whichever is lower + applicable taxes
    • Switch from fixed rate loan to variable rate loan: 0.50% of the principal outstanding or a cap of Rs.50,000 whichever is lower + applicable taxes
    • Switch from TruFixed rate to variable rate: 1.75% of the principal outstanding + applicable taxes

    *Salaried

    **Self-Employed

    HDFC Home Improvement Loan for NRIs

    HDFC offers home improvement or renovation loans to NRIs, PIOs and OCIs. You can avail loan advisory services in the country you currently reside, and the loan is extended to both existing and new customers.

    The interest rates and other charges for the HDFC NRI Home Improvement Loan are the same as that of a resident Indian.

    FAQ’s

    1. How does HDFC decide the eligible loan amount?
    2. The bank decides your loan eligibility primarily by your income and repayment capacity. Other parameters include your age, qualification, your spouse’s income, number of dependents, assets and liabilities, savings history, and the stability and continuity of occupation.

    3. What are the types of interest rates on the HDFC home improvement loan?
    4. HDFC Bank offers both variable rate of interest as well as a fixed rate of interest for the HDFC Home Improvement Loan. You can also switch between the types of interest rates, subject to conversion fees.

    5. What does the term ‘own contribution’ mean?
    6. It’s the difference in amount between the value of the property and the bank’s loan amount.

    7. What does the term ‘market value’ mean?
    8. It refers to the estimated property value as per the prevailing market conditions.

    9. What security will I have to provide for availing the home improvement loan?
    10. The property being financed by HDFC will be the security to avail the loan or any other collateral or interim security as may be required by the bank.

    11. What does encumbrance refer to?
    12. Any claims or charges on the property caused by liabilities such as unpaid loans or bills is known as an encumbrance on a property.

    13. Should the property be insured?
    14. You’ll have to insure the property for fire and other hazards during the tenure of the loan. You must produce the evidence of payment of the insurance as and when HDFC requests. Also, HDFC should be the beneficiary of the insurance policy.

    15. How do I repay the loan?
    16. The bank offers several modes of repayment of your loan:

      • ECS (Electronic Clearing System) - Issue a standing instruction to your bank to make the instalment payments.
      • Post-dated cheques – Issue this cheque from your salary account.
      • Direct deduction from your employer – Your employer will deduct your monthly instalments from your salary.
    17. Can I prepay the loan amount ahead of schedule?
    18. You can prepay the loan availed from HDFC by making part or full payment; however, this process attracts prepayment charges.

    19. How do I make a loan application?
    20. Click on the “Apply Now” option on the website to submit your application online. Alternatively, you can download the application from HDFC’s website, or you could collect it from one the bank’s branch.

      

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